Muni Bond Funds Report Meager Inflows

Flows into municipal bond mutual funds scraped and clawed into positive territory the week of May 22.

Funds that report their flows weekly saw inflows of just $63 million, Lipper FMI numbers showed. That compared with $306 million in inflows the market reported for the week of May 15.

The municipal market struggled this past week. Muni yields climbed faster than those of Treasuries. The weeks larger deals required concessions of between roughly five and nine basis points to get done. Traders described trading in the secondary market as lackluster and showing noticeable weakening.

The 10-year triple-A yield rose eight basis points on the week from Friday to 1.90%, Municipal Market Data numbers show. The 30-year climbed nine basis points over the same span to 3.08%. The two-year inched up one basis point to 0.29%.

Treasury yields, by comparison, more modestly. The benchmark 10-year jumped seven basis points from last Friday to 2.02%.

The 30-year increased three basis points to 3.20% over the period. The two-year ended the week flat at 0.25%.

Muni ratios to Treasuries moved little beyond the front end of the yield curve. The 10-year and 30-year are holding roughly around 95%. The two year got cheaper over the week from Friday to 116%.

Assets for all muni funds that report their flows weekly rose for the first time in three weeks to $328.3 billion. The week prior, they reported $326.5 billion.

The value of the holdings for weekly reporting funds plunged by $294 million. The week before, they fell by $580 million.

The four-week moving average for all municipal bond mutual funds that report their flows weekly was $127,000 of inflows, compared to $41 million of outflows the week before.

There were relatively heavy outflows long-term bond funds that report their flows weekly. They continued for a 12th straight week, at $139 million. They reported $3.6 million of outflows last week.

High-yield muni funds, after a brief window of inflows, recorded relatively strong outflows.

High-yield funds that report flows weekly saw $123 million in outflows, Lipper said. The previous week, they reported $54 million in inflows.

Assets for high-yield funds that report their flows weekly climbed to $46.14 billion, up from $45.92 billion reported the week before.

The value of the holdings for weekly reporting high-yield funds rose by $4.0 million. Last week, they decreased by $28 million.

The four-week moving average for all high-yield municipal bond funds that report their flows weekly showed $53 million of outflows, falling from $44 million of outflows the week before.